I have been developing trading systems for over 15 years and today I had to throw away 4 different systems I was working on because they didnt make the grade… but the effort paid off because my fifth system idea was absolute GOLD.
The frustration and satisfaction at the end reminded me that these three things are critical for you to be successful as a trading system developer. This is true regardless of whether you want to trade stocks, futures, forex or cryptocurrencies!
In order to make money trading, you need to allow your winning trades to grow rather than as soon as you get a profit snatching a quick profit and closing that trade out. If you snatch the quick profit and close the trade out, you guarantee that you’re going to get a small win. Trouble is when you get a loss, that loss is always going to be bigger than that small win that you’ve managed to capture.
The trading industry is hell bent on getting you to daytrade so that they make more commissions and can charge you higher fees for all of the real time services… Here are some important reasons to think differently about your trading strategy.
The vast majority of traders don’t give enough consideration to things that can go massively wrong in their stock trading. This is the biggest reason why I am still profitable after over 18 years trading and I have never blown up an account.
Designing and backtesting stock trading systems is a subtle art… many traders focus on the wrong metrics when they are optimizing and refining their systems. Make sure you are not among them!
Some plants are highly Specialised and can only survive in very narrow conditions… some are robust and can live almost anywhere. You need your trading system to be like the plants that survive everywhere. It doesnt have to make money in every market, but it does have to keep your account alive no matter what happens in the stock market!
Too many traders try to follow exactly the same indicators, trading strategies and trading systems… this makes most commonly known trading strategies worthless, but it only takes a subtle shift from these common strategies to generate great profits.
You need to immerse yourself in trading books as well as YouTube videos so you get a coherent learning experience.
Learning to trade stocks may seem hard, but it is easier than digging in a mine… Trading systems are important to sift through the market to find the best trading opportunities.
There is one way of gaining inspiration for your next trading move that more and more stock traders are forgetting about.